Real property losses are capital, not ordinary
In Musselwhite, T.C. Memo. 2022-57, the Tax Court held that a taxpayer’s losses from the sale of four lots (real property) were ordinary in nature, as opposed to capital.
Partnership and LLC Taxation
Publicly traded partnerships: Investors’ tax considerations
Interests in publicly traded partnerships (PTPs) can be a valuable part of an investor’s portfolio, but because these investments are partnership interests, the tax reporting for them can be complex, and losses passed through by PTPs may be limited. This article discusses the tax compliance and loss limitation issues involved with, and tax planning considerations for, holding interests in PTPs.
Real estate partnership restructuring and potential disguised sales
With certain restructuring transactions, careful consideration is needed to prevent the transaction from being deemed a disguised sale.
Self-employment tax and LLCs
An LLC member’s distributive share of LLC income and loss from a trade or business is generally subject to self-employment tax, raising several issues around guaranteed payments, retirement payments, rental income, and members who are employees of the LLC.
Target capital account allocations in 11 easy steps
This item discusses the complexities encountered when working with partnership allocations under a target capital structured operating agreement.
10 good reasons why LLCs should not elect to be S corporations
The owners of an LLC may be tempted to have the LLC elect to be treated as an S corporation for federal tax purposes. However, there are a host of issues that should be considered before making this move. In this article, the authors discuss 10 reasons why it may not be beneficial for an LLC to make an S corporation election.
Partnership examinations: Imputed underpayment modification
This item discusses how to request modification of an imputed underpayment.
Questions to consider before electing into a PTE tax
Twenty-nine states have enacted a passthrough entity tax as a possible workaround to the federal state and local tax deduction cap.
Regulations streamline partnership basis elections
Final regulations issued by the IRS and Treasury allow a Sec. 754 election statement to be submitted without a partner’s signature.
Meaning of ‘filed’ defined for purposes of delinquent partnership returns
Delinquent partnership returns are ‘filed’ when they are delivered by the requested method to and received by an IRS official authorized to receive such returns;
State PTE elections: A big picture perspective
Practitioners may face a difficult analysis in helping their clients understand their possible PTE election opportunities.
Guaranteed payments vs. distributive share of income
For certain partners, the presumed preference for receiving a distributive share of income (including a priority profit allocation) may need further evaluation to determine how it coordinates with various international tax provisions.
Depreciation recapture in the partnership context
This item discusses how depreciation recapture applies in certain situations involving partnerships.
Nonliquidating distributions: Ways to determine basis
This item considers to what extent taxpayers may be able to apportion basis instead under Sec. 704(c) principles.
A practical guide to partnership division planning
This item provides an overview of the division rules and touches on some key issues to consider when a transaction involves a partnership division.
Payments to LLC members for services
When LLC members receive payments for services performed for the LLC, the tax treatment depends on whether the member is performing the services in the capacity as a member.
Tennessee taxation of passthrough entities
An insufficient understanding of the rules can be dangerous to taxpayers when determining which entity has a filing responsibility in Tennessee.
State tax considerations around the sale of a partnership interest
This item discusses how owners selling partnership interests should address which states may attempt to tax the entire gain, how taxation of the gain may be divided among the states where the partnership does business, compliance considerations, and technical developments and trends that may affect the transaction.
Deferred compensation not deductible in year basketball franchise sold
No deduction is allowed in the year of sale of a basketball team for deferred compensation owed to two of the team’s players.
More Schedule K-2 and K-3 FAQs posted
In eight new FAQs on its website, the IRS covers some special issues, including several that it says will be added to the forms’ instructions.
